§12A-1-201.

§12A-1-201.
   
                            GENERAL DEFINITIONS.
                                      
   Subject to additional definitions contained in the subsequent articles
   of the Uniform Commercial Code which are applicable to specific
   articles or parts thereof, and unless the context otherwise requires,
   in the Uniform Commercial Code:
   
   (1) "Action" in the sense of a judicial proceeding includes a
   recoupment, counterclaim, setoff, suit in equity, and any other
   proceedings in which rights are determined.
   
   (2) "Aggrieved party" means a party entitled to resort to a remedy.
   
   (3) "Agreement" means the bargain of the parties in fact as found in
   their language or by implication from other circumstances including
   course of dealing or usage of trade or course of performance as
   provided for in the Uniform Commercial Code (Sections 1-205, 2-208 and
   2A-207 of this title). Whether an agreement has legal consequences is
   determined by the provisions of the Uniform Commercial Code, if
   applicable; otherwise by the law of contracts (Section 1-103 of this
   title). (Compare "Contract".)
   
   (4) "Bank" means any person engaged in the business of banking.
   
   (5) "Bearer" means the person in possession of an instrument, document
   of title, or certificated security payable to bearer or endorsed in
   blank.
   
   (6) "Bill of lading" means a document evidencing the receipt of goods
   for shipment issued by a person engaged in the business of
   transporting or forwarding goods, and includes an airbill. "Airbill"
   means a document serving for air transportation as a bill of lading
   does for marine or rail transportation, and includes an air
   consignment note or air waybill.
   
   (7) "Branch" includes a separately incorporated foreign branch of a
   bank.
   
   (8) "Burden of establishing" means the burden of persuading the triers
   of fact that the existence of the fact is more probable than its
   nonexistence.
   
   (9) "Buyer in ordinary course of business" means a person who in good
   faith and without knowledge that the sale to him is in violation of
   the ownership rights or security interest of a third party in the
   goods buys in ordinary course from a person in the business of selling
   goods of that kind, but does not include a pawnbroker. "Buying" may be
   for cash or by exchange of other property or on secured or unsecured
   credit and includes receiving goods or documents of title under a
   preexisting contract for sale but does not include a transfer in bulk
   or as security for or in total or partial satisfaction of a money
   debt.
   
   (10) "Conspicuous": A term or clause is conspicuous when it is so
   written that a reasonable person against whom it is to operate ought
   to have noticed it. A printed heading in capitals, as: NONNEGOTIABLE
   BILL OF LADING, is conspicuous. Language in the body of a form is
   "conspicuous" if it is in larger or other contrasting type or color.
   But in a telegram any stated term is "conspicuous". Whether a term or
   clause is "conspicuous" or not is for decision by the court.
   
   (11) "Contract" means the total legal obligation which results from
   the parties' agreement as affected by the provisions of the Uniform
   Commercial Code and any other applicable rules of law. (Compare
   "Agreement".)
   
   (12) "Creditor" includes a general creditor, a secured creditor, a
   lien creditor, and any representative of creditors, including an
   assignee for the benefit of creditors, a trustee in bankruptcy, a
   receiver in equity, and an executor or administrator of an insolvent
   debtor's or assignor's estate.
   
   (13) "Defendant" includes a person in the position of defendant in a
   cross action or counterclaim.
   
   (14) "Delivery" with respect to instruments, documents of title,
   chattel paper, or certificated securities means voluntary transfer of
   possession.
   
   (15) "Document of title" includes bill of lading, dock warrant, dock
   receipt, warehouse receipt, or order for the delivery of goods, and
   also any other document which in the regular course of business or
   financing is treated as adequately evidencing that the person in
   possession of it is entitled to receive, hold, and dispose of the
   document and the goods it covers. To be a document of title a document
   must purport to be issued by or addressed to a bailee and purport to
   cover goods in the bailee's possession which are either identified or
   are fungible portions of an identified mass.
   
   (16) "Fault" means wrongful act, omission, or breach.
   
   (17) "Fungible" means goods or securities of which any unit is, by
   nature or usage of trade, the equivalent of any other like unit. Goods
   which are not fungible shall be deemed fungible for the purposes of
   the Uniform Commercial Code to the extent that according to a
   particular agreement or document unlike units are treated as
   equivalents.
   
   (18) "Genuine" means free of forgery or counterfeiting.
   
   (19) "Good faith" means honesty in fact in the conduct or transaction
   concerned.
   
   (20) "Holder" with respect to a negotiable instrument, means the
   person in possession if the instrument is payable to bearer or, in the
   case of an instrument payable to an identified person, if the
   identified person is in possession. "Holder" with respect to a
   document of title means the person in possession if the goods are
   deliverable to bearer or to the order of the person in possession.
   
   (21) To "honor" is to pay or to accept and pay, or where a credit so
   engages to purchase or discount a draft complying with the terms of
   the credit.
   
   (22) "Insolvency proceedings" includes any assignment for the benefit
   of creditors or other proceedings intended to liquidate or
   rehabilitate the estate of the person involved.
   
   (23) A person is "insolvent" who either has ceased to pay his debts in
   the ordinary course of business or cannot pay his debts as they become
   due or is insolvent within the meaning of the federal bankruptcy law.
   
   (24) "Money" means a medium of exchange authorized or adopted by a
   domestic or foreign government and includes a monetary unit of account
   established by an intergovernmental organization or by agreement
   between two or more nations.
   
   (25) A person has "notice" of a fact when:
   
   (a) he has actual knowledge of it; or
   
   (b) he has received a notice or notification of it; or
   
   (c) from all the facts and circumstances known to him at the time in
   question he has reason to know that it exists.
   
   A person "knows" or has "knowledge" of a fact when he has actual
   knowledge of it. "Discover" or "learn" or a word or phrase of similar
   import refers to knowledge rather than to reason to know. The time and
   circumstances under which a notice or notification may cease to be
   effective are not determined by the provisions of the Uniform
   Commercial Code.
   
   (26) A person "notifies" or "gives" a notice or notification to
   another by taking such steps as may be reasonably required to inform
   the other in ordinary course whether or not such other actually comes
   to know of it. A person "receives" a notice or notification when:
   
   (a) it comes to his attention; or
   
   (b) it is duly delivered at the place of business through which the
   contract was made or at any other place held out by him as the place
   for receipt of such communications.
   
   (27) Notice, knowledge, or a notice or notification received by an
   organization is effective for a particular transaction from the time
   when it is brought to the attention of the individual conducting that
   transaction, and in any event from the time when it would have been
   brought to his attention if the organization had exercised due
   diligence. An organization exercises due diligence if it maintains
   reasonable routines for communicating significant information to the
   person conducting the transaction and there is reasonable compliance
   with the routines. Due diligence does not require an individual acting
   for the organization to communicate information unless such
   communication is part of his regular duties or unless he has reason to
   know of the transaction and that the transaction would be materially
   affected by the information.
   
   (28) "Organization" includes a corporation, government or governmental
   subdivision or agency, business trust, estate, trust, partnership, or
   association, two or more persons having a joint or common interest, or
   any other legal or commercial entity.
   
   (29) "Party", as distinct from "third party", means a person who has
   engaged in a transaction or made an agreement within the provisions of
   the Uniform Commercial Code.
   
   (30) "Person" includes an individual or an organization (See Section
   1-102 of this title).
   
   (31) "Presumption" or "presumed" means that the trier of fact must
   find the existence of the fact presumed unless and until evidence is
   introduced which would support a finding of its nonexistence.
   
   (32) "Purchase" includes taking by sale, discount, negotiation,
   mortgage, pledge, lien, issue or reissue, gift, or any other voluntary
   transaction creating an interest in property.
   
   (33) "Purchaser" means a person who takes by purchase.
   
   (34) "Remedy" means any remedial right to which an aggrieved party is
   entitled with or without resort to a tribunal.
   
   (35) "Representative" includes an agent, an officer of a corporation
   or association, and a trustee, executor, or administrator of an
   estate, or any other person empowered to act for another.
   
   (36) "Rights" includes remedies.
   
   (37) (a) "Security interest" means an interest in personal property or
   fixtures which secures payment or performance of an obligation. The
   retention or reservation of title by a seller of goods regardless of
   shipment or delivery to the buyer (Section 2-401 of this title) is
   limited in effect to a reservation of a "security interest". The term
   also includes any interest of a buyer of accounts or chattel paper
   which is subject to Article 9 of this title. The special property
   interest of a buyer of goods on identification of such goods to a
   contract for sale under Section 2-401 of this title is not a "security
   interest", but a buyer may also acquire a "security interest" by
   complying with the provisions of Article 9 of this title. Unless a
   consignment is intended as security, reservation of title thereunder
   is not a "security interest" but a consignment is in any event subject
   to the provisions on consignment sales (Section 2-326 of this title).
   
   (b) Whether a transaction creates a lease or security interest is
   determined by the facts of each case; however, a transaction creates a
   security interest if the consideration the lessee is to pay the lessor
   for the right to possession and use of the goods is an obligation for
   the term of the lease not subject to termination by the lessee, and:
   
   (i) the original term of the lease is equal to or greater than the
   remaining economic life of the goods,
   
   (ii) the lessee is bound to renew the lease for the remaining economic
   life of the goods or is bound to become the owner of the goods,
   
   (iii) the lessee has an option to renew the lease for the remaining
   economic life of the goods for no additional consideration or nominal
   additional consideration upon compliance with the lease agreement, or
   
   (iv) the lessee has an option to become the owner of the goods for no
   additional consideration or nominal additional consideration upon
   compliance with the lease agreement.
   
   (c) A transaction does not create a security interest merely because
   it provides that:
   
   (i) the present value of the consideration the lessee is obligated to
   pay the lessor for the right to possession and use of the goods is
   substantially equal to or is greater than the fair market value of the
   goods at the time the lease is entered into,
   
   (ii) the lessee assumes risk of loss of the goods, or agrees to pay
   taxes, insurance, filing, recording, or registration fees, or service
   or maintenance costs with respect to the goods,
   
   (iii) the lessee has an option to renew the lease or to become the
   owner of the goods,
   
   (iv) the lessee has an option to renew the lease for a fixed rent that
   is equal to or greater than the reasonably predictable fair market
   rent for the use of the goods for the term of the renewal at the time
   the option is to be performed, or
   
   (v) the lessee has an option to become the owner of the goods for a
   fixed price that is equal to or greater than the reasonably
   predictable fair market value of the goods at the time the option is
   to be performed.
   
   (d) For purposes of this subsection:
   
   (i) additional consideration is not nominal if:
   
   (A) when the option to renew the lease is granted to the lessee the
   rent is stated to be the fair market rent for the use of the goods for
   the term of the renewal determined at the time the option is to be
   performed, or
   
   (B) when the option to become the owner of the goods is granted to the
   lessee the price is stated to be the fair market value of the goods
   determined at the time the option is to be performed. Additional
   consideration is nominal if it is less than the lessee's reasonably
   predictable cost of performing under the lease agreement if the option
   is not exercised;
   
   (ii) "reasonably predictable" and "remaining economic life of the
   goods" are to be determined with reference to the facts and
   circumstances at the time the transaction is entered into; and
   
   (iii) "present value" means the amount as of a date certain of one or
   more sums payable in the future, discounted to the date certain. The
   discount is determined by the interest rate specified by the parties
   if the rate is not manifestly unreasonable at the time the transaction
   is entered into; otherwise, the discount is determined by a
   commercially reasonable rate that takes into account the facts and
   circumstances of each case at the time the transaction was entered
   into.
   
   (38) "Send" in connection with any writing or notice means to deposit
   in the mail or deliver for transmission by any other usual means of
   communication with postage or cost of transmission provided for and
   properly addressed and in the case of an instrument, to an address
   specified thereon or otherwise agreed, or if there be none, to any
   address reasonable under the circumstances. The receipt of any writing
   or notice within the time at which it would have arrived if properly
   sent has the effect of a proper sending.
   
   (39) "Signed" includes any symbol executed or adopted by a party with
   present intention to authenticate a writing.
   
   (40) "Surety" includes guarantor.
   
   (41) "Telegram" includes a message transmitted by radio, teletype,
   cable, any mechanical method of transmission, or the like.
   
   (42) "Term" means that portion of an agreement which relates to a
   particular matter.
   
   (43) "Unauthorized" means a signature made without actual, implied or
   apparent authority and includes a forgery.
   
   (44) "Value". Except as otherwise provided for in Sections 3-303,
   4-210 and 4-211 of this title with respect to negotiable instruments
   and bank collections, a person gives "value" for rights if he acquires
   them:
   
   (a) in return for a binding commitment to extend credit or for the
   extension of immediately available credit whether or not drawn upon
   and whether or not a charge-back is provided for in the event of
   difficulties in collection; or
   
   (b) as security for or in total or partial satisfaction of a
   preexisting claim; or
   
   (c) by accepting delivery pursuant to a preexisting contract for
   purchase; or
   
   (d) generally, in return for any consideration sufficient to support a
   simple contract.
   
   (45) "Warehouse receipt" means a receipt issued by a person engaged in
   the business of storing goods for hire.
   
   (46) "Written" or "writing" includes printing, typewriting, or any
   other intentional reduction to tangible form.